Why Marvell Technology Shares Were Sacked


Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Marvell Technology (NAS: MRVL) , a designer of analog, mixed-signal, and digital signal microprocessing chips for mobile devices, sank as much as 13% following an announcement that it was found guilty in a patent infringement case brought against the company by Carnegie Mellon University.

So what: Back in March, Carnegie Mellon sued Marvell over the use of two patents that it claimed detect data stored on a computer's hard-disk drive by filtering out unwanted electrical signals. According to Carnegie Mellon, Marvell used its patented technology in at least nine types of innovations. With the jury's unanimous guilty verdict, U.S. District Judge Nora Barry Fischer rendered a $1.17 billion fine against Marvell and according to the victorious group of lawyers, K&L Gates LLP, the total penalty could triple from current levels.

Now what: Now shareholders cross their fingers and hope that the fine levied against Marvell doesn't triple. To me, that seems highly unlikely and I wouldn't be shocked to see an appeal drag this verdict out even further. In the interim, Marvell shares, which already seemed inexpensive, just got even cheaper, and I would suggest giving the company another look if you're a deep value investor.

Craving more input? Start by adding Marvell Technology to your free and personalized Watchlist so you can keep up on the latest news on the company.

More expert advice from The Motley Fool
The Motley Fool's chief investment officer has selected his No. 1 stock for the next year. Find out which stock it is in our brand-new free report: "The Motley Fool's Top Stock for 2013." I invite you to take a copy, free for a limited time. Just click here to access the report and find out the name of this under-the-radar company.

The article Why Marvell Technology Shares Were Sacked originally appeared on Fool.com.

Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.